Outsource IT the Smart Way,The Smart Way to IT Outsource,Information Technology Outsourcing in Smart Way

Outsource IT the Smart Way

Introduction

Information Technology is big business for financial
services companies, worth several billions. If we look at
the global picture, the annual spending on IT requirement of
companies stands at about $350 billion. The costs could be
for proprietary, custom made or packaged software and
hardware services. Almost 35 percent of this spending goes
to third-party service providers. Thus IT is an important
tool for these companies to leverage their competitive edge,
and it is crucial to find simple and cost effective methods.
Of all the different areas involved in offshore software
development, the licensing part is generally the most
expensive and troublesome area. Here are a few tips to
recognize and therefore avoid unnecessary costs.

Evaluate Current Patterns

Study the factors that determine the licensing expenses
thoroughly. With time, software vendors have become more and
more flexible about the terms and options they offer. Thus
it pays to be updated about current trends. It is also
important to evaluate the licensing configuration of the
software the company is using at the moment. Most of the
companies with a good standing allow their customers to
upgrade to more advanced software through resettlement.
Another method to reduce costs is to select for a term
license rather than a perpetual license.

Thorough Cost Analysis

This is crucial to maintain competitive edge. Even slight
margins can sometimes lead to huge losses. Once the cost
analysis is done properly, the manager can set the budget.
For example it is often more cost effective to outsource
non-core functions like HR and payroll. Thus it doesn't come
as a surprise that many companies outsource functions like
Customer Relationship Management, procurement and billing.

Schedule Well

It is crucial to develop the right kind of schedule, so that
the project is completed in time so as to meet your
requirements. The deadlines have to be realistic enough too,
so that quality is not compromised. The customer company
should have the final say on this, and also keep a keen
watch over the proceedings.

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